What a difference a year makes! The normal, expected spring increases in sales activity, coupled with relaxing COVID-19 policies, have created a very busy March. Buyer demand largely has been unabated in the face of rising home prices and mortgage rates. Existing home and new construction activity continue to remain below levels necessary to bring the market back into balance, pointing to a busy and competitive buyer scene in the coming months.
While many home builders are working to increase their activity, the cost of lumber and other materials and a backlogged supply chain continue to limit new construction. Also, supply costs have increased substantially. New methods, including exciting technology like 3D printed homes, could help speed construction and reduce costs in the future. Still, realistically these new approaches are several years away from making a measurable impact in the market.
For March, New Listings in the Chattanooga region increased 1.2 percent from a year ago to 1,223. Pending Sales were up a whopping 27.5 percent to 1,174. For a perspective on how tight the current market is, we’ve watched inventory levels shrink 64.5 percent from a year ago to 868 units.
Prices continued to gain traction. The Median Sales Price increased a sizeable 20.9 percent over March 2020 to $255,000. Days on Market (the average amount of time a property is on the market before it is under contract) was down 41.1 percent to 33 days. Sellers continue to be encouraged as Months Supply of Inventory was down 70.4 percent to 0.8 months.
The hot market right now only reinforces the need for people looking to buy a home to utilize the knowledge and expertise of a realtor. We often know of sellers looking to list soon, so working with a realtor helps buyers be ready sometimes on very short notice to preview properties and write an offer. Next week, we will review key considerations for buyers and sellers in this fast-paced market of sometimes sight-unseen offers and multiple offer situations. This market is competitive, and realtors work tirelessly for their clients, day in and day out. That’s Who We R.